Chapter 2. Actionable Strategy
This chapter explores some of the challenges of complexity and the importance of learning and adapting. A four-step model describes how Design Thinking, Lean, and Agile mindsets come together and how you can apply them practically, along with a range of methods, tools, and resources to consider for getting the work done.
The Problem with Complexity
A big challenge for many products and services is that they’re deployed into highly uncertain and complex systems, like our economy, a customer ecosystem, or even a large enterprise. These complex adaptive systems are made up of interconnected but autonomous entities, acting and reacting to one another, without centralized control. Predicting a specific result or outcome in these conditions is incredibly difficult because behavior in such a system is emergent. Although uncertainty is high, there are two characteristics we can be confident about in complex adaptive systems:
- They’re unknowable
- There are multiple truths, and the system cannot be described from only one perspective or language. That is, nobody really understands everything. And we can’t fully know anything.
- They’re intractable
- That is, nobody is in control, the current condition emerges, and nothing is predictable.
This means that nobody knows what is going on, nobody can control it, and nobody can predict anything. Then there are humans—just one of the actors in the system—who are famously irrational in the way we behave.1
There is no faster way of predicting the future, other than just going there.
Igor Nikolic
So, all strategies are full of risk and uncertainty. Those based only on modelling, analysis, insight, and perceived knowledge alone are more likely to fail than those based on action. It’s not that those things are bad or pointless, but that action is a priority because it’s by doing things that we learn most about what works.
Now let’s consider the relationship between vision, strategy and action.
Vision and Strategy
There is an immutable tension between vision and strategy. The archetypical strategist is a deep thinker. A sage. A prophet. She seeks knowledge, analyses trends, and sees patterns. In pursuit of the goal, she plans action and anticipates reactions. Always observing, always ready, always ahead.
The archetypical visionary is a radical thinker. An idealist. A magician. She sees a future that defies today’s logic. Contrary evidence is only a speedbump on the way to achieving unreasonable expectations. Unbending, unrelenting, unstoppable!
Vision sets direction, and strategy is how we get there. It’s foolish to rush to action without some idea of where you’re heading. Just as it’s pointless to plan, but never do.
We must plan to act, act to learn, learn to win.
Defining Actionable Strategy
Strategy without action isn’t a strategy at all. Yet, it’s so common that goals and objectives are proclaimed, yet no strategic intent, overall approach, or basic guidelines are given on how to achieve them. There’s some tension in the degree to which action should be specified. After all, top-down directives under command and control management often fail (because of the uncertainty inherent in complex systems) and are easily dismissed as rhetoric (not reflective of the day-to-day reality of getting the job done). On the other hand, fully decentralized, and uncoordinated action isn’t always strategic. If the left hand doesn’t know what the right hand is doing, some activities might undermine others.
An actionable strategy is one that defines enough direction to allow action to occur. It’s lightweight, rapid, and adaptable. Actionable strategy acknowledges that nothing is truly knowable, complex systems are intractable, and that learning and responding is the best path to desired outcomes. Figure 2-1 describes four steps for actionable strategy.
Figure 2-1. Four steps of actionable strategy
Step 1: Diagnose the Current Condition
A deep understanding of the current situation is the foundation for determining what to do about it. In his book Good Strategy, Bad Strategy,2 author Richard Rumelt describes diagnosis as an exercise in thinking and imagination, and of judgment and evaluation. We gather information and determine the facts to identify problems and opportunities. We use critical analysis to make judgments about the meaning of what we know. We frame the problem, analyse information, and synthesis insights for strategic decision making.
Diagnosis is a judgement about the meaning of facts.
Richard Rumelt
This first step draws on the focus and empathy for customer, intuitive reasoning and questioning that is baked into Design Thinking. This helps us to discover customer value and identify areas for further exploration. Lean brings critical reasoning and analytical judgment. This helps later when defining our first action and benchmarking our future success.
Table 2-1 details a range of assessment methods that are useful for understanding the situation, making judgments, identifying opportunities, and benchmarking.
| Method | What is it | Further reading |
|---|---|---|
| Behavior mapping | A behavioral research method for observing the relationship between people and a place or environment. It reveals traffic patterns, interactions, and opportunities to optimize the service experience. | Doctor disruption on behavior mapping |
| PESTLE, SWOT, Porter’s five forces | Structured business analysis techniques for exploring common dimensions of business. | Five forces, PESTLE, SWOT, |
| Five whys | Explore a problem space and find root causes by asking why five times. | Atlassian’s guide to 5 Whys |
| Concept mapping | A sense-making method using words to visualize the complexities of a system by connecting many ideas and insights related to a given domain or focusing question. Concept maps help to elicit understanding and reveal new insight. | Novak and Cañas, Concept mapsa |
| Ecosystem maps | Consider who’s who and how value is created beyond your business in the overall net of who’s playing. | Drawing your business ecosystem |
| Service ecology mapping | Think about the total set of needs of your customers and the ecology, not just the one’s you’re delivering upon. | Service ecology maps |
| Value stream mapping | See Table 3-1. | |
| Customer research | See Chapter 3. | |
| Service blueprints | Service blueprints visualize customer interactions over time (front-stage), while showing operations, technology systems, processes and staff interactions (back-stage) that underpin the service experience. A useful tool for diagnosing issues, and modelling future solutions. | ONE Design, Guide to Service Blueprinting Polaine & Løvlie, Service Design: From Insight to Implementation.b |
| KJ Analysis (aka affinity diagramming) | A fast, thematic analysis technique for groups that helps to identify areas of focus for further exploration. | Jared Spool on KJ analysis |
a Joseph D. Novak and Alberto J. Cañas. (2010). “The theory underlying concept maps and how to construct and use them,” Práxis Educativa, 5(1): 9–29. b Andrew Polaine, Lavrans Løvlie, and Ben Reason, Service Design: From Insight to Implementation (Rosenfeld Media, 2013). | ||
Step 2: Explore Possible Futures
By entertaining what might be, we generate options. Exploring possibilities is all about asking provoking questions, entertaining unconstrained thinking, following tangents, and new avenues of thought. We create choices before we make choices.
Don’t look for facts or answers—look for better questions. It’s the questions we ask, and the meaning we explore that will generate the insights most useful to strategy.
Dr. Jason Fox
This is where we take advantage of the concept of emergence. By engaging in a quest to explore the possibilities, we discover new meaning, and it’s that which often informs us where to go next. This is the homeland of Design Thinking. We’ve understood the problem or opportunity in step 1, now we’re exploring many possible solutions, before later converging on our proposal in step 3.
Table 2-2 describes methods for exploring possible futures.
| Method | What is it | Further reading |
|---|---|---|
| Scenario planning | Get your futurist hat on and challenge yourself to think about multiple possible futures for your business. | Schwartz, The Art of the Long Viewa |
| Design charrettes (aka crazy eights) | A participatory design method where participants articulate many potential solutions to a given problem using fast sketches. Ideas are then compared and contrasted, with the strongest candidates selected for further exploration by the group. | Nielsen Norman Group on design charettes Google Ventures guide to crazy eights |
| Elito method | A generative design method using five building blocks to bridge the gap between analysis, synthesis, and potential solution designs. | Doctor disruption on Elito method |
| Prototyping | See Chapter 3. | |
| Design games | Collaborative innovation games designed to help teams overcome challenges and solve many different kinds of problems together. | Gray et al. Gamestorming (O’Reilly) |
| Business origami | An early stage design method for modelling the value exchange between actors in a system, based on selected scenarios. Great for rapidly exploring new possibilities within a system. | Jess McMullin on Business origami |
a Peter Schwartz, The Art of the Long View (Currency Doubleday, 1996). | ||
Step 3: Set a Course
This is where we make choices about which direction to take. We’re evaluating our options, deciding what matters most, and homing in on strategic intent. Setting a course is more than simply declaring our goals and objectives. We must define an overall direction. Then, we need some guiding principles on how we believe we’ll win, yet leaving out any specific instructions about precisely what to do.
Be stubborn on the vision, but flexible on the details.
Jeff Bezos
This is about strategy and leadership. Lean thinking informs how we set challenges, and coordinate coherent action. Agile provides the means for creating technology solutions while keeping options open and remaining adaptive to change. The decentralization of control and leadership of autonomous teams is how we stay aligned to purpose and make better decisions.
Chapter 4 explores how we define our strategy, set direction and lead people on the journey to achieve the desired outcomes.
Step 4: Take Action and Adjust
Now it’s time to test our beliefs through action.
Vision without action is hallucination.
Thomas Edison
We make our hypotheses testable, run the experiments, measure the outcomes, and refine our initial strategy through learning. This is where strategy is quenched by action and made real. A strategy without action is merely speculation and conjecture. It’s from action that we learn the most.
Chapter 3 includes a range of ways by which we can articulate our beliefs and test ideas. Chapter 5 describes how Agile software delivery enables organizations to adapt to change at scale.
Conclusion
The four steps to actionable strategy are like the glue between these mindsets. The fundamentals of Design Thinking are put to best use in the first two steps, where our intent is to understand today’s reality and explore the possibilities for the future. The Lean mindset comes to bear in steps one, three, and four, where it’s all about identifying the best opportunities to pursue, setting direction, and learning our way to success through deliberate experimentation. Much of this experimentation might not involve writing a line of code—after all, working software is still an experiment, just a really expensive one. As confidence increases, and software is the experiment, Agile is how teams constantly adapt to change, repeatedly adjusting their course and taking next steps (step 4).